The Sinocism China Newsletter For 05.02.13

So far it is a matter of a few military tents, a handful of shivering soldiers and a disagreement over a remote and never-demarcated line in the Himalayas. Yet a lengthening stand-off between Chinese and Indian soldiers in a disputed part of Ladakh reflects a profound problem: already it ranks as the most serious confrontation between the Asian giants since the late 1980s.

Third flag meeting fails; China wants India to dismantle security structures in Ladakh – The Times of India Indian officials were told by Chinese commanders that they would have to wait for orders from Beijing. This seems to fly in the face of Prime Minister Manmohan Singh’s assessment that the incident was “localized” and that the government had a plan to resolve it. It seems clear now that rather than local adventurism, a well-thought out Chinese strategy is at work that caught India off guard at a time when the government is grappling with domestic political turmoil and on the eve of a visit by Chinese Premier Li Keqiang.

Chinese incursion 19km, but 750 sq km at stake for India – The Times of India While China on Tuesday rebuffed India’s plea to withdraw its troops, squatting 19km inside Indian territory at Raki Nala in the Depsang Bulge area, fresh imagery from Indian spy drones has shown that the People’s Liberation Army has already started using trucks to replenish supplies for over 30 soldiers stationed there. The pictures, which also show that PLA is trying to convert the track there into a proper road, are transforming what the government had called a “localized problem” into a first-rate diplomatic crisis.

China’s Ladakh intrusion: Two maps tell this dangerous story – Firstpost Large swathes of the Line of Actual Control are disputed—nothing but the Karakoram pass is accepted by both sides as a frontier. There’s been plenty of disputation as a result, notably over the construction of a road in 2005-2006 across parts of the Depsang plateau claimed by India. The former intelligence official RN Ravi has recorded that incursions in this sector went up from 150 in 2005 to 240 in 2010. Neither side, though, has ever held ground—that is, until now.

No plan to cancel China visit: Salman Khurshid – Times Of India NEW DELHI: External affairs minister Salman Khurshid on Tuesday said that as of now there was no plan to cancel his visit to Beijing in wake of Chinese incursion in Ladakh. He, however, appeared to keep his options open saying “one week is a long time in politics”.

Any readers have insight into why China has chosen this moment to inflame tensions with India, and how this situation gets resolved? Won’t India’s dynamic, free press eat the country’s leaders alive if they concede on this issue?

One of my 2013 goals for Sinocism is to increase reader participation. I will happily incorporate your smart comments (anonymously or not, you tell me) into the daily email. So if any of you can help us understand what is going on with this latest China-India flare up, please share.

Samsung’s marketing team believes People’s Daily readers are the right demographic for the new Galaxy S4, even in the midst of a corruption crackdown that would seem to make the phone too expensive for most officials. The company is running a half page advertisement (People’s Daily, or see this screenshot from Twitter) on page eight of today’s People’s Daily.

Today’s Links:

THE ESSENTIAL EIGHT

China April HSBC PMI eases on weak external demand | Reuters The final HSBC Purchasing Managers’ Index (PMI) dropped to 50.4 in April from March’s 51.6 and was largely in line with a flash reading last week of 50.5. Fifty divides expansion from contraction on a monthly basis. China’s official PMI on Wednesday painted a similar picture, falling to 50.6 in April from an 11-month high of 50.9 in March as new export orders fell.

China Cracks Down on Military License Plates – NYTimes.com “The impact of the crackdown is not devastating, but there is certainly softness in the retail sales data,” he said. “The impact can most clearly be seen in the restaurant business, but there has been visible weakness in the auto market — something that will inevitably deteriorate should the crackdown intensify.”// especially if intensifies in the military, as it looks to. any estimates as to how much of high-end F&B and luxury spending driven by military-related activities?

Related:中国军网_为实现强军目标提供有力保证 ——全军和武警部队贯彻习主席重要指示加强作风建设综述 ■本报记者 赛宗宝PLA Daily page 1 on need to change work styles if want to achieve goal of a “Strong Military”// 作风不是“季候风”。作风问题具有顽固性和反复性，抓一抓有好转，松一松就反弹，转作风正风气只有起点没有终点。4月2日，习主席又对深入推进部队作风建设作出“三个坚持”“三个着力”重要批示，为军队作风建设指明了方向、提供了根本遵循。三军将士坚决贯彻习主席重要批示精神，正以更加务实的举措，更加自觉的行动，把加强作风建设不断引向深入，为实现强军目标提供有力保证。

人民日报-广东省委常委、省纪委书记黄先耀 网络涉腐舆情处置 需要规范化制度化（问政·看领导干部用网）Guangdong CDIC Secretary in people’s daily on role of the internet in corruption crackdown…note that the salacious online exposes have for the most part stopped since the NPC..they were clearly getting out of control, now being “channeled” through more official outlets // 然而，网络涉腐舆情社会关注度高，给社会造成了好像反腐败就是靠网络来暴露线索、揭露腐败的错觉。就目前我们掌握的情况看，网络爆料的线索占查处案件的比例很小。近年来，各级纪检监察机关查处的违纪违法案件线索的来源，主要都是通过信访和查案等主渠道提供的。为了积极应对新媒体的挑战，今后各级纪委要切实运用和引导新媒体，做到一是要转变观念，敢用新兴媒体；二是要把握规律，善用新媒体；三是要积极稳妥，用好新媒体；四是要整合资源，促进新旧媒体互动融合。在法律层面，要逐步将一些弹性规则变成相应的法律法规，以实际效果取信于民。“线上”反映的问题，最终还是要靠“线下”来解决。

独家：阿里入股 新浪管理层大赚9亿入腰包-搜狐ITSohu IT claims in an “Exclusive” that Sina CEO and other executives cashed out USD 145M as part of the Alibaba investment in Weibo. if true might explain the relatively muted rise in Sina’s share price since deal announced? // 在阿里新浪资本联姻之时，有一个数字却被忽视了，那就是新浪管理层的套现情况。经过笔者估算，在这笔交易之后，新浪管理层套现1.45亿美金（约合9亿人民币），这也意味着，以曹国伟为首的管理层将约1/4的投资现金揣进了自己的腰包。

Related:SEC–Sina 2012 20-F In August 2010, the Company’s subsidiary Weibo Corporation (formerly known as T.CN Corporation) adopted a 2010 Share Incentive Plan (the “2010 T.CN Plan”), which permits the granting of stock options, share appreciation rights, restricted share units and restricted shares of T.CN to employees, directors and consultants. The Company granted options of Weibo Corporation equivalent to approximately 1.3% and 1.1% and 15.9% of the subsidiary’s ordinary shares on a fully diluted basis in 2012, 2011 and 2010, respectively.//so 18.3% of weibo corporation not actually owned by outside sina shareholders prior to the alibaba deal?

四部委：2015年初步遏制华北地下水水质恶化 – 新华财经 – 新华网government now officially worried about underground water pollution in north China, 4 agencies say they will preliminarily arrest worsening water quality by 2015// 环境保护部、国土资源部、住房和城乡建设部及水利部近日联合印发《华北平原地下水污染防治工作方案》。方案提出， 2015年初步遏制华北地下水水质恶化趋势，城镇集中式地下水饮用水源水质状况有所改善。方案的出台，意味着众所关注的地下水污染防治工作将在华北平原率先突破。

China Cyberspies Outwit U.S. Stealing Military Secrets – Bloomberg As the White House moves to confront China over its theft of U.S. technology through hacking, policy makers are faced with the question of how much damage has already been done. During their multiyear assault on defense contractors, the spies stole several terabytes — equal to hundreds of millions of pages –of documents and data on weapons programs, dwarfing in sheer quantity any theft of Cold War secrets. The QinetiQ hack may have compromised information vital to national security, such as the deployment and capabilities of the combat helicopter fleet.

BUSINESS AND ECONOMY

China: A Billion Strong but Short on Workers – WSJ.com Demand for urban workers in China exceeded supply by a record amount in the first quarter, according to the government. Meanwhile, the average monthly income for migrant workers rose 12.1% from a year earlier. “There is no let up in the labor shortage,” says Kelvin Lau, a senior economist Standard Chartered Bank. Manufacturers “are realizing that this is not a cyclical thing. It’s not about riding out a storm.”

Where the Chinese credit is going… | FT Alphaville While Wang doesn’t think a debt crisis is imminent, she does believe there are certainly reasons to worry. One is the recent rapid increase in the debt-to-GDP ratio. This is a very good point which we mentioned in February and forgot to point out in our ruminations of the past couple of weeks. To recap:

China: Subprime for the masses | beyondbrics But according to a series of recent articles in the Chinese press, many other funds of trusts are lowering the drawbridge for ordinary savers. The investment barrier has been progressively cut – first to Rmb300,000, then to Rmb100,000 and even less. High-yield investment products are a welcome present for hard-toiling Chinese savers. But funds of trusts are one gift horse they may want to look in the mouth.

Controlling China’s Currency by Zhang Monan – Project Syndicate It is indisputable that China is over-issuing currency. But the reasons behind China’s massive liquidity growth – and the most effective strategy for controlling it – are less obvious….This trend is exacerbated by the declining efficiency of financial resources in the state sector, a product of the soft budget constraint implied by easily accessible, cheap capital. Consequently, maintaining high GDP growth rates requires an ever-increasing volume of credit and a continuously growing money supply. So China is stuck in a currency-creating cycle: GDP growth encourages investment, which boosts demand for capital. This generates liquidity, which then stimulates GDP growth.

清剿债市：更大债市蠹虫在一级市场|债市|一级市场|链条_21世纪网21st Century Business Herald on the ongoing bond crackdown and bigger problems, in the primary market, that have not yet been adressed// 债市黑幕屡被掀开一角，但都被轻轻放下。为何这次是审计署掀起监管风暴？而不是金融直接监管部委，这本身就值得深思。此次风暴漩涡在二级市场，而更大债市蠹虫却在一级市场，他们能被揪出来吗？ 作为中国最大有价证券市场的主管者，面对近期银行间债市爆出的连串弊案，中国人民银行试图以更多实质性的举措向公众及高层证明，他们有能力约束银行间债券市场上那些捞取个人私利不惜触碰法律底线的胆大妄为者。

GM pulls Chevrolet ad that includes song labeled as racist General Motors Co., seeking to boost China sales 75 percent by 2015, apologized for a Chevrolet ad that included a song referring to “the land of Fu Manchu” where all of the girls sing “ching, ching, chop-suey,” which one Chinese newspaper called racist. // ad agency and marketing team fired yet?

Newspaper warns of “underground” government-funded extravagance – Xinhua In addition, the article noted, there have also been reports of tactics like “sauna bath receptions in farmyards” and “mineral water bottles filled with luxury liquor” as measures to circumvent supervision. As the root of such problems lies in abuses of power, the fundamental solution should be strict restraint of the use of power, He urged. The official’s prodigal lifestyles are being rectified following the CPC leadership’s requirements, but the newly emergent problems have reminded the authorities of the need to strictly enclose power “in the fence of supervision” and “the cage of regulation,” the article said.

Artists’ donation diverted for other charity: RCSC – People’s Daily OnlineThe Red Cross Society of China (RCSC) has admitted that a donation it received from over 100 artists was not used as the donors had designated. However, it said the donation of 84.72 million yuan (13.62 million U.S. dollars) was spent on another charity project, which was “generally in accordance with the donors’ will.”

浙江5人疑坐冤狱17年后获假释 复查结果将公布_新闻_腾讯网another publicized case of wrongful convictions, this time of 5 men in Zhejiang who spent 17 years in jail…interesting, seems almost weekly now that media is allowed to report on a case of legal injustice.// 新京报讯 （记者刘刚）4月28日，“浙江萧山5青年劫杀出租车司机案”最后一名“案犯”王建平获假释。去年12月，该案出现新线索，浙江省高院复查此案。此时，5案犯已在狱中度过17年。

河南被关12年村民无罪获释:死者家属陷入绝望|李怀亮|死刑|嫌犯_新浪新闻Henan villager freed from jail after 12 years of detention…another case of an innocent man going to jail for a crime he did not commit// 而对李怀亮来说，被关将近12年，一切恍若隔世。记者在叶县李怀亮的姐姐家看到，看着媒体对李怀亮事件的报道，李怀亮和家人失声痛哭。李怀亮已知母亲去世的消息，他想去给母亲上坟。另外，他也得到了出走妻子的信息，“过几天就会回来”。

Macau helps Las Vegas Sands top 1Q expectations – AP Las Vegas Sands Corp. drew a record number of gamblers in Macau in the first quarter and took in more money from its Singapore casinos, helping lift net income by 15 percent to top expectations. // what does this say about corruption crackdown?

武汉公安局”鬼屋”训民警:长发白衣女尸惊悚啼哭–时政–人民网surprised one of the bridge blogs has not picked up the story of wuhan police training in a “haunted house”// 月黑风高之时，一人在废弃的院落中，面临断臂、白骨、骷髅等恐怖景象，你还HOLD得住吗？黄陂滠口，就有这样的一间小院，每当到了夜晚，它也开始履行自己的使命。听上去是否有点惊悚？上周五晚，记者就进入了这座神秘的“鬼屋”中，执行了一项神秘的任务。

FOREIGN AND DEFENSE AFFAIRS

China says U.S. should watch Japanese nationalism | Reuters The United States should be just as concerned as other countries about a rise in Japanese nationalism, China’s ambassador to Washington said, hinting that the United States should not offer Japan encouragement in its dispute with China over a group of islets.

Japan, not China, taking “unilateral or coercive actions” on Diaoyu Islands dispute: Chinese envoy – Xinhua | English.news.cn Cui made the remarks in response to U.S. Defense Secretary Chuck Hagel’s unfounded assertion on the dispute between Japan and China over the Diaoyu Islands. Addressing a joint news conference Monday with visiting Japanese Defense Minister Itsunori Onodera, Hagel claimed that the U.S. “opposes any unilateral or coercive action that seeks to undermine Japan’s administrative control, a message (Chairman of the U.S. Joint Chiefs of Staff) General (Martin) Dempsey conveyed to his counterparts last week in Beijing.” In an interview with Washington-based Chinese media, Cui said some of Hagel’s remarks on the meetings between Dempsey and the Chinese side do not square with the facts.

Hagel mentioned Senkakus at Japan’s behest / U.S. stance sends clear message to China over isles – The Japan News By clarifying its commitment to the Senkaku Islands, the United States sent a warning to China at a time when its ships have repeatedly intruded upon Japanese territorial waters near the islands. Although he avoided mentioning China by name, Hagel confirmed U.S. commitment to the islands with strong wording. The first talks between Japanese and U.S. defense chiefs under the second administration of Prime Minister Shinzo Abe thus set the stage for the two nations to take concerted action in urging an ever aggressive China to exercise self-restraint over the Senkaku Islands.

Daily Press Briefing – May 1, 2013 QUESTION: I know your longstanding policy on Diaoyu Islands or Senkaku Islands, and both the State Department and DOD have said that the United States opposes any unilateral and coercive actions that seeks to undermine Japan’s administrative control of the island. However, yesterday the Chinese ambassador to the U.S., Cui Tiankai, said it’s Japan, not China, that is taking unilateral or coercive actions on the island issue. So in your view, who is taking unilateral and coercive actions here?

Chinese NASA Spy Suspect to Plead to Computer Rule Charge – Bloombergugly case // Bo Jiang, who was indicted March 20 for allegedly making false statements to the U.S., was charged yesterday in a separate criminal information in federal court in Newport News, Virginia. Jiang unlawfully downloaded copyrighted movies and sexually explicit films onto his NASA laptop, according to the court filing. A plea hearing is set for tomorrow. Along with the misdemeanor, the government said it had resolved the false statements case, Assistant U.S. Attorney Gordon Kromberg said in a filing today.

China imposes 15-mile fishing rule in Panatag Shoal | The Philippine Star Chinese surveillance ships deployed within the Philippines’ Panatag Shoal are now imposing a 15-mile fishing restriction around the contested area, fishermen from Zambales province complained Wednesday….China virtually occupied Panatag shoal (Scarborough Shoal) since last year after President Benigno Aquino III ordered the withdrawal of the country’s vessels following a tense standoff triggered by the apprehension of Chinese fishermen and seizure of their fishing vessels by the passing Philippine Navy flagship BRP Gregorio del Pilar, while conducting illegal poaching and illegal fishing activities in the area in April last year.

Former GM engineer, husband sentenced in trade secret theft case | Reuters A former General Motors Co (GM.N) engineer was sentenced to a year and a day in prison and her husband was sentenced to three years for conspiring to steal trade secrets for use in China, federal prosecutors said. Former engineer Shanshan Du, 54, and her husband Yu Qin, 52, each received sentences well below the roughly eight to 10 years that the government had sought.

China’s environment minister backs out of 3-way meeting in Japan – AJW by The Asahi Shimbun China’s environment minister will skip an upcoming three-way meeting with his Japanese and South Korean counterparts, becoming the latest official to stay away from a high-level meeting involving Japan amid heightening diplomatic tensions between the two countries. Zhou Shengxian, the environmental protection minister, was expected to be the first Chinese Cabinet minister to visit Japan since the government nationalized three of the Senkaku Islands in the East China Sea in September.

With Burma in Mind, China Quietly Supports Wa Rebels–VOA Thailand-based security analyst and author of the report, Anthony Davis, said Beijing is trying to balance historic camaraderie with the Wa and its relations with Burmese authorities. “The Chinese cannot afford to ignore the ethnic forces along their border, nor at the same time can they afford to ignore the central government,” Davis said. “Is that to say that China is directly supplying that equipment? No, it’s not. Clearly the supplier of that equipment is known to senior elements in the government, but that is not to say that they are directly involved in financing. They need to maintain a degree of deniability here,” he said.

HONG KONG, MACAO AND TAIWAN

香港奶粉滞销药房堆起奶粉山 业界吁撤限奶令|香港|奶粉|滞销_21世纪网and now there is a glut of unsold milk powder in hong kong after the restrictions on exports…// 核心提示：香港立法会批发及零售界议员方刚说，希望可趁五一小长假作为观察期，如果这段时间内奶粉供应稳定，就表示约章措施有“成绩”，这样业界就会在5月底向政府提交“成绩表”，游说其研究撤销“限奶令”。

Gifts For Mainland Officials Anger Hong Kong – China Real Time Report – WSJ Last week, in papers submitted to city legislators, the agency revealed that Timothy Tong, recently retired ICAC head, spent thousands of dollars on gifts for mainland Chinese officials during his five years in office. Some of the gifts ranged from the mundane—including numerous crystal models of the ICAC’s headquarters—to the bizarre, including ICAC-branded pens that cost as much as $215 each and some described in notes simply as ICAC “cauldrons,” which cost $32 apiece.

Baidu Valuation Cut in Half as Ad Sales Slide Dims Profit – Bloombergmore important, many investors do not believe it has a credible mobile strategy// Baidu Inc. (BIDU) is trading more than 50 percent below its average valuation over the past five years as the Chinese Internet company struggles to diversify while maintaining profit growth amid a slowdown in advertising.

阿里巴巴战略投资新浪微博：动机与前景分析-财经网Huxiu on the prospects for Alibaba’s Weibo investment // 新浪微博是“叫好不叫座”的东西，影响力一时间风头无两，但就是挖不出金子来。更何况最近一段时间来，微博大有一些疲态。三季度财报曹国伟吹嘘自家有4亿用户，这个牛皮吹的实在是大了点。新浪总微博用户数也就个1亿左右的水平

Cloud Computing in China: An Insider’s Perspective | TechRice Steve Mushero, co-founder and CEO of ChinaNetCloud, is a veteran of the both the Silicon Valley technology industry and one of China’s most successful Internet companies. When I told him that I was hoping to learn more about the cloud computing ecosystem in China and how it compared to that of the U.S., his response was eye-opening: when it comes to cloud computing, he noted, “the whole world is far behind Amazon and China is far behind the rest of the world.”

A whole different ‘Iron Man’ for the Chinese market | Marketplace.org Chen helps consult film studios in China. He says the Dr. Wu character is more central to the plot of the Chinese version of “Iron Man 3.” He’s so central that, according to the Chinese actor who plays Dr. Wu, his role goes from a five second cut-away in the American version to saving Iron Man’s life in the Chinese version.

China tests bottled drinking water using ‘Soviet standards’ | South China Morning Post China still follows regulations adopted from the Soviet Union to test bottled drinking water, the Beijing News reported on Thursday. “When the World Health Organisation updated its detection methods, [we] updated the standard for tap water, but not for bottled water,” an unnamed expert with the Institute for Environmental Health and Related Product Safety in Beijing told the paper.

Backlog at Metro Vancouver recyclers follows China’s new green waste policy Metro Vancouver recycling firms are seeing a backlog of recyclable materials, particularly plastics, after China decided it would no longer accept other nations’ dirty plastics or potentially contaminated recovered materials. China’s so-called 10-month Green Fence policy, which came into effect in February, has resulted in stricter scrutiny of foreign containers carrying everything from paper to metals and plastics when they arrive at the Chinese docks.

Science Fiction in China: A Conversation with Fei Dao Science fiction in China is attracting special interest of late. The mind-bending trilogy Three Body by Liu Cixin has been selling strong for its genre. Sci fi is also a theme of the new edition of the Beijing-based (English language) literary magazine Pathlight, slated to come out next week. Alice Xin Liu, managing editor of the magazine, tweeted “Chinese scifi is, politically, most daring genre in Chinese contemporary literature”.